New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1887-06-25
THE REACTION. IN STOCKS.

Wall Street had 4 reaction yesterday, part
natural but partly due to dishonest reports o.
| Mr. Gould's death The street has had many
reactions of the same sort, when prices Of
stocks have been largely and those of som'
| stocks unreasonably advanced, but OF course
every such hour of excitement presents It's owl
peculiar features and seems to those most
interested to be unprecedented. The prom
nent feature yesterday was the severe fall IL
the prices of stocks with which Mr.. Gould has
been connected, and the false reports circulated
| evidently made the decline greater in these
but there were honest reasons for some sch
back in the prices of many securities.
1t was shown .on Monday that reports of the
market had been gradually downward for four
weeks, and that the movement continued this
week, accelerated somewhat by the events at
the West. The disbursement Of holders, who
have been induced 10 purchase doubtful or in
flated properties, or new stocks for a great adj
vance, would probably have made further
reaction inevitable, whether rapid or gradual,
even if the collapse of the coffee corner, tho
wheat corner and the Fidelity Bank had nos
como TO increase. the pressure. After every
such sudden fall it is said that somebody ma
nipulated it, but there are always some who arc
doing their utmost to cause decline. Most
reactions are intensified by false reports, but
few days pass in Wall Street when the market
is active without desperate attempts to make
lying reports effective These devices do not
often succeed when there are no natural or lc-
climate reasons for dissatisfaction on the part
Of holders. Cheaper wheat ought ordinarily
to favor higher stocks. But the immediate
effect of the collapse at Chicago was to tie up
for time such large resources that the de-
mand from this city has been considerable.
The rotten bank at Cincinnati does not appear
TO have caused losses here of serious charac-
ter, but every such event disturbs confidence
for the moment Excessive speculation, re-
sorting in its desperation to dishonest methods.
is the immediate cause of the disturbance both
here and at the West and it would have been
strange if the stock market had not been
affected to somo extent by Western events,
The Interstate Commerce bill has also to
some extent impaired the confidence of many
security holders. During the fist month after
it went into effect the hopes Of railroad men
were kindled by large returns of earnings. and
the increase in earnings compared with last
wear has not ceased But each week under
turbing influence upon many branches of in
dustry and trade could not Immediately DO
measured. The recent decision Of the Inter
state Commission, though framed with cs-
pccial care to avoid undue apprehension, made
il clear that any enforcement of the law must
affect business at numerous points, and must
especially affect the rates charged by railroads
at competing points where water routes were
not concerned. 1t is not strange if many peo-
pic interested in securities have felt that. until
the effects Of the law could be more definitely
understood. it would be safer for them to lessen
their holdings But the most potent cause OF
the disturbance is clearly the great imitation
of the currency, commenced last fall for pc
lifted reasons. which stimulated unnatural
speculation in stocks, IN most kinds Of prod
ucts and in real estate. The very nature Of
such an excited advance makes more or less
frequent and severe reactions inevitable. Ono
came last December, but it did not restore to
their natural level some securities, and the
general average Of prices had again risen five
weeks ago to the highest point touched last
winter.
These reactions are usually followed by
quick rallies, and this one is by no means an
exception. But it is not the part OF good
sense to advise the public that a great and
long continued rise in stocks is now to begin
Immediately. because there has been fall
The Interstate law must become better under
stood, and its work more fully tested by cx-
perience before very accurate estimates OF the
value of different securities can be formed. 1t
is equally true that the enormous volume OF
new securities which have been listed this
year forms an element of present weakness.
and will until these have been fully distributed
to investors or have more clearly shown their
value. But the conditions do not warrant any
panic about the general business Of The coun.
try, which is remarkably large and active.
with money in ample supply at nearly all
points and sustained by production of wealth
snrnaSSed